Bank of England Holds Rate; WH Smith Slumps 4.6%

Arthi Gupta
07 Jul, 2011
New York City

The UK indexes rose after the Bank of England held its key rate unchanged at 0.5% and maintained bond purchase program at

[R]3:20 PM London – The UK indexes rose after the Bank of England held its key rate unchanged at 0.5% and maintained bond purchase program at £200 billion. The UK manufacturing output increased in May. WH Smith plunged 4.6% after the retailer reported a 1% drop in total group sales.[/R]

The central bank in Europe and England diverged to tackle the rising inflation. The European Central Bank lifted the rate but the Bank of England left its key rate on hold.

The European Central Bank raised its main interest rate from 1.25% to 1.5%, its second rate hike this year.

In London, FTSE 100 Index gained 57.86 or 0.96% to 6,058.72 and the pound edged lower to $1.5969.

BoE Holds Rate

The Bank of England left its key interest rate unchanged at a historic low again and maintained the size of the quantitative easing.

The Monetary Policy Committee decided to retain the interest rate at 0.5% and also retained its bond purchase program at £200 billion.

The minutes of the meeting will be released on July 20.

UK Manufacturing Output Increases

UK industrial production increased 0.9% on a monthly basis in May, after easing 1.7% in April, data from the Office for National Statistics showed today.

Within overall industrial production, mining and quarrying output dropped 5.6% with a fall in oil and gas production output of 5.7%.

Manufacturing output rose 1.8% on a monthly basis in May, following a 1.6% drop in April.

On a yearly comparison, industrial production declined 0.8% and manufacturing output advanced 2.8% in May.

Gainers & Losers

Autonomy Corp. plc rose 2% to 1,781 pence after the provider of software development and distribution agreed to license its software to an unnamed US-based law firm.

Aveva Group Plc dipped 0.17% to 1,770 pence after the provider of engineering data and design information technology systems reported strong performances in South Korea and some of the South East Asian countries but trading in North America remains tough and the performance in Europe is mixed.

Hays Plc declined 2.13% to 100.90 pence after the recruitment agency said fourth quarter net fees increased 14% from last year, driven by its strong international operations. On a like-for-like basis, the growth was 11%.

Man Group Plc soared 3.52% to 255.60 pence after the asset manager recorded first quarter net inflows of $3.7 billion, reflecting record sales of $9 billion and redemptions of $5.3 billion.

Punch Taverns Plc dropped 1.28% to 73.05 pence after the pub operator decided to spin off its spirit business into a new company called Spirit Pub Co. Plc.

WH Smith Plc plunged 4.58% to 498.10 pence after the retailer reported a 1% drop in total group sales and a decline of 4% in like-for-like sales for the 18-week period ended on July 2.